The Indian government may have to pay a total of Rs 85 crore, in case it decides not to take any further legal recourse in the Vodafone arbitration matter of over Rs 20,000 crore retrospective taxation, sources said. Vodafone has won the case against India at the Permanent Court of Arbitration (PCA) in The Hague over the retrospective tax demand, with the court holding that the conduct of India's tax department is in breach of "fair and equitable" treatment. Finance Ministry sources said that the court has asked the Indian government to pay only 4.3 million pounds, or about Rs 40 crore, which is 60 per cent of the tribunal's administrative cost while the rest 40 per cent would be borne by Vodafone. Also, the government may have to refund the tax collected, which is about Rs 45 crore, only if it does not go for appeal against the award.

Therefore, the total outgo would be around Rs 85 crore only. The Finance Ministry, in a statement, said that the government will take a decision on further course of action, including legal remedies, among other options after studying the award and consulting with its counsel on the matter. The ministry said it "has just been informed that the award in the arbitration case invoked by Vodafone International Holding BV against Government of India has been passed. The Government will be studying the award and all its aspects carefully in consultation with our counsel".